MSF Programs

I don't think I had mentioned it anywhere on this blog previously, but I've applied to several Master of Finance programs in Boston. I applied to Bentley and Boston College's part-time programs and the full-time MFin program at MIT Sloan. I applied to BC on 10/13 and got in 10/27. I applied to Bentley on 10/19 and was accepted 10/29. My MIT application was submitted on 11/1, but it'll be a while before I hear back.

Barring acceptance to MIT, I'm going with Boston College over Bentley, and the program starts in January. So fast. I've already submitted a deposit check and turned in all of the necessary paperwork. I just finished my financial aid junk today and while BC doesn't offer merit-based aid to part-time students, I do qualify for federally subsidized loans. My firm will pay for a nice piece of the degree, so I have that going for me, too. I think in the end this will cost me around $20,000, which will increase my already substantial loan payment by $210 a month (based on a 10-year, 5% loan). The degree will take two years to finish and I'm currently studying at home to test out of two prerequisites that I need to satisfy before I can start. I never took a Financial Accounting course at Brandeis, but I regularly read 10K and 10Q reports made available through the SEC, so I'm familiar with quite a bit of the material. I took a Corporate Finance class at Brandeis, but Boston College is still asking me to take a test. I'll try to take the Accounting test by the end of this month and the Corporate Finance one by the end of next month, allowing me to start class on time in January. Otherwise, I would need to take two classes (at any four-year school in the area), and that could be as much as $6,000. Pass on that.

The Time Paradox by Philip Zimbardo & John Boyd

I've just finished Philip Zimbardo & John Boyd's The Time Paradox: The New Psychology of Time That Will Change Your Life. My dad sent me a link to a video of Dr. Zimbardo giving a lecture on time and I was sucked right in. If Philip Zimbardo is an unfamiliar name, he was the psychologist behind the 1971 Stanford Prison Experiment. In this study, twenty-four healthy and well-balanced Stanford undergrads were split into two groups: mock prison guards and mock prisoners. The students were specifically chosen because they were seemingly without emotional problems and had a healthy outlook on life. The prison guards were told that they had to maintain order and get the prisoners to perform certain menial tasks, things that life in a prison would necessitate. Within 36 hours a mock prisoner had an emotional breakdown and physical abuse by the prison guards was rampant. According to Wikipedia: "Experimenters said that approximately one-third of the guards exhibited genuine sadistic tendencies. Most of the guards were upset when the experiment concluded early." The mock prison guards refused to let some of the mock prisoners go to the bathroom, they refused to let the prisoners empty their sanitation buckets, they removed mattresses from some prisoners' cells as punishment, and "some prisoners were forced to go nude as a method of degradation, and some were subjected to sexual humiliation, including simulated sodomy." Without any irony, Philip Zimbardo said in 1971 that the study was a success because the students had internalized their roles, roles assigned at random in the beginning of the experiment (that just made me think of the movie Dark City). Zimbardo was actually called in by the Bush administration to interview the prison guards of Abu Ghraib and provide expert testimony on how "evil" can happen. His conclusion: the creation of "evil" is easy when the conditions are right, and the administration created ideal conditions at Abu Ghraib by allowing everyone to operate without feeling personally responsible, by making sure no one there was in charge, and then by not keeping an eye on things.

So, zoom forward about 30 years, and Philip Zimbardo is working on time perspectives. Another researcher's Marshmallow Study serves as a good introduction:

If you just watched the clip above, the kids who were able to delay gratification by not eating the first marshmallow have what Dr. Zimbardo calls a "future time perspective." The kids who ate the marshmallows as soon as they had the chance are present-oriented. In his work, Dr. Zimbardo has identified six time perspectives (no one is any one time perspective -- we tend to have characteristics of each time perspective, but when measured, we "spike" around just a few): past-positive, past-negative, present-hedonist, present-fatalist, future, and transcendental future. Past-positives remember the past fondly and past-negatives brood over bad decisions that were made. Present-hedonists like to spend their money, do drugs, and give little thought to future consequences. Present-hedonists are more likely to be overweight and probably got pregnant in high school. Present-fatalists are depressed and feel that they have no control over the future. Future-oriented people invest their money, work hard toward future goals, score higher on standardized tests, and generally run the world. Transcendentalists work toward a spiritual future; suicide-bombers and Christians who believe in the book of Revelation jump to mind.

The Time Paradox expounds on this basic philosophy. It also claims that someone with a well-balanced time perspective is someoneone who is past-positive, present-hedonistic, and future oriented, but at the right times. Duh. So, when you're at work, it's future time. When you leave work, present-hedonism should take over. When you think about the past, focus on the good times and stop having old arguments in your head or thinking about how different your life would be if you hadn't made very specific mistakes.

I thought that the ideas in the book were interesting, but the writing wasn't very good. The chapters were arranged around broad themes but lacked conclusions. This book wasn't building toward any profound thing, it was just presenting lots of interesting facts with a similar theme. I'll also have to assume that there aren't many more time-perspectives that they've missed. I wasn't under the impression that these guys were actively looking for other time perspectives to add to their theory or trying to come up with arguments to refute their own thesis. The Time Paradox as a book is just a step above airport literature, but the ideas it presents are profound and potentially life-altering. That is, life-altering if I wasn't already a future, who (unless I missed something) are the clear winners. Futures have to look out for being too future-oriented, but if they can avoid that, they've got it made.

Take Dr. Zimbardo's ZTPI test and find out your time perspective here.

The Next 100 Years: A Forecast for the 21st Century

I'm impressed by this George Friedman. He's the CEO & founder of the global intelligence firm Stratfor (short for Strategic Forecasting), which publishes a daily intelligence briefing for its customers, including Fortune 500 companies and international government agencies. His most recent book is a series of predictions for the next 100 years, based on current trends and geopolitical realities. The weakness of this book is that it's an impossible undertaking. No matter how informed the author is, he'll never hit the mark. Mr. Friedman explains in the introduction that his predictions aren't based on guesswork, but on a careful analysis of geopolitical realities and long-term trends. He compares what he does to playing a game of chess. It may seem to the observer that there are an infinite number of possible moves, but to a chessmaster, there are actually only a few moves if he knows how his opponent will respond. This is game theory. If you apply the same thinking to international relations, as Mr. Friedman does, you can come to some very logical and likely conclusions (in the short term).

According to the author, the three most important trends in the 20th century were the collapse of 400-year old European empires, the quadrupling of the global population, and the dramatic improvement in telecommunications technologies. The three most important trends for the next 100 years are the historical rise of the US, the collapse of the population explosion, and the evolution of robotics and space-based systems.

So what can we expect in the next 100 years? What are the actual predictions? I'll list some of the outcomes that I find most interesting, but the further George Friedman goes into the future, the more ridiculous this whole exercise seems. We only have to wait until 2030 before Japan has a moon base. Shortly thereafter, the United States will deploy three armed space stations into geosynchronous orbit, ensuring American dominance of space and the world's oceans. The Japanese will start the next World War on Thanksgiving Day, 2050 at 5pm (the date isn't important, but the reasoning behind that date is). They will have built a secret second base on the dark side of the Moon and figured out how to successfully attack our "Battle Stars" by then. Japan, with its ally, Turkey, will then unsuccessfully wage a war on the United States and draw the planet's other great empire, Poland, into the conflict. But that only gets us to mid-century! So, I actually stopped reading the book shortly after this war scenario. I found the book to be less intellectually stimulating and more like reading a bad Sci-Fi novel. So, let's only follow Mr. Friedman out about 20 years and stop. Past that point, this just seems silly. I find it hard to believe that Mr. Friedman doesn't also realize how frivolous this is. And I don't mean to disparge him, because he seems like a really, really smart guy. I love most of this book (especially how he breaks up US history in a way that I've never thought of before). But, he acknowledges that one of the three most important trends in the 20th century was the collapse of European empires, but would he have realized that in 1910? It's as silly as George W. Bush's claim that terrorism will be the great issue of the 21st century, made less than 10 years into this century!

So, here's what we can expect in the next 20 to 30 years (summed up nicely in the YouTube video I've included below): China will fragment. There is a wealthy coastal region that benefits more from its trade with the outside world than its relationship with Beijing, and an impoverished interior that has a radically different agenda. Beijing will be unable to walk the tightrope that it needs to in order to keep China united. Russia will also collapse. We'll fight another Cold War and Russia will lose again. It'll lose for largely the same reasons it lost last time, but this time it will have a smaller population, less territory, more powerful neighbors, and it won't be able to count on support from China. Plus, the United States is relatively more powerful than it was last time. Labor will cease to be cheap. The global population explosion of the past 100 years will peak and begin to decline sometime in the next 100 years. Global wages will rise and more countries will find themselves competing with each other for immigrants, essential to economic growth. The United States has an edge and will keep it. The economic burden to the United States for the retiring baby boomers will lead to an economic collapse more massive than the 2008-9 recession. The current collapse isn't being exacerbated by demographics, but the next one will be. The next economic crisis, occurring anytime between 2014 and 2025, will look like 1970s style stagflation. The last president of this era (George Friedman divides American history into 5 eras, and the modern one began with the election of Ronald Reagan) will try to fix the recession with more of what has worked in the past. He will fail. The next president (elected in 2028 or 2032) will usher in a new period of growth and prosperity in America and our nation will boom. The world's next great powers will be the US, Japan, Turkey and Poland. Turkey is the most significant and powerful actor in the Muslim world. It was the center of that world during the Ottoman Empire, and we'll see it play a similar role again. Japan will benefit from the collapse of Russia and China, and it will move its production to the Pacific rim regions that have broken away from those nations. Poland will benefit from the collapse of Russia and its close relationship with the US during the Second Cold War. NATO will collapse when Western European countries like France and Germany try to avoid confrontation with Russia during that war. Western Europe will continue to decline in relative power and Eastern Europe will begin to be the most dynamic and powerful part of that continent. Turkey and Japan will have a complimentary relationship and the US will try to break them apart. This will lead to the war of 2050, which Japan will start much like it started the War of the Pacific by bombing Pearl Harbor.

I'd give this book an 8 or 9 out of 10. It was a lot of fun to read and think about.

Technorati tags: George Friedman, American Century, Japan, Turkey, Poland, Stratfor, The Next 100 Years, Geopolitics

750

Took the GMAT. Killed it.

Three Years Ago, Today

From my journal:

April 3, 2007 (Tuesday) 1:20am -- Pudu Hostel, Kuala Lumpur

"What did I do in the past 7 hours? I arrived back in town just in time to catch yet another rainstorm, after a short trip on the bus from the Batu Caves. Got back to my hostel in good order, browsed through my hostel's collection of books and found John Banville's The Sea, which I took (and since no one seemed to notice, kept without trading in my Shakespeare or paying the 5 MYR). Got dinner around the corner after spending 3 hours in the internet cafe. Found a $150.00 flight from Singapore to Chennai on the 12th (Luke arrives at the crack of dawn on the 13th), giving me from 1:30pm on the 12th to 4am the next day to get to Delhi. The big German doofus said that luxury accommodations on the train from Chennai to Kathmandu might be $40. Good enough for me. So I found my ticket on Air India Express and I'll pay tomorrow. Also, I didn't need to wait a day to visit the Indian consulate. There didn't seem to be any holiday listed on the High Commission to KL's website. Chatted with D before she went off to work as a bonus.

At the Ganesh restaurant around the corner I got idiappam with vegetarian korma and thosai. The Indian Malaysian guys seemed to hover around me and I interpreted that as anxiety because I wasn't spending any money. I said thosai and the guy hopefully added "masala thosai?" No. The regular 1 MYR thosai, please. I read some of my stolen Banville book (he writes in a fake way in my opinion, not fake, but... forced?) in my room and then got the 1 MYR tea and rice dish from that restaurant from the first night. Soy milk on the way home for some protein. On the way through the lobby I was stopped by the German and the Japanese guy from Nara; I wound up talking to them for a long time. The Japanese guy insisted on using only Japanese, but I got embarrassed because I was exposed as a fraud. I eventually broke the conversation off and went to bed. The German guy is ridiculous. He said openly, and without realizing why we would be offended, that Americans don't know anything and all Japanese are robots. He then left us to tell two Japanese girls how big his cock is. I came back up here to shower (refilled my tea at 7-11) and my Japanese roommate seems to be in and out. I wonder if he's waiting for me to go to sleep so he can turn off the light and join me. FOR SOME HOT SEX!

Cheeseheads, they are not

Maine might be the obvious comparison for Heilongjiang (黑龙江, or Black Dragon River), the northeastern most province of China, but I'm going with Wisconsin. What connects Heilongjiang and Wisconsin? Naming conventions, cold winters, dairy, homogeneity, and Wal-Mart.

Both Wisconsin and Heilongjiang are named for rivers. The Wisconsin River begins at the Michigan state border and flows south until it empties into the Mississippi River. Heilongjiang is the Chinese name for the Amur River, which separates depressed and stagnant eastern Russia from Chinese Manchuria. It's just like how Lake Michigan separates Wisconsin from depressed and stagnant lower Michigan.

Green Bay is almost at the same latitude as Heilongjiang's capital and first city, Harbin. Wisconsin's lowest recorded temperature is -55°F, balmy compared to Heilongjiang's record low of -62.14°F. I'm sure people in either place will tell you to leave and go somewhere warmer.

Heilongjiang produces more milk than any other province in China. You can think of it as China's dairy capital, but China produces "almost zero" cheese. Supposedly, this is because the Chinese can't digest cheese and don't care for it, but with the increased popularity of Western-styled restaurants in China, this is changing (at least for the wealthy). Wisconsin on the other hand, is first in the US in cheese production and first in the world in cheese pride. At least, I think the guy in this photo has cheese pride. It could be cheese irony or cheese ennui. It's hard to tell with all that face paint.

Manchuria (of which Heilongjiang is a part) is the ancestral home of the Manchu people, who ruled China from 1644-1912 (the Qing Dynasty). No American President or Vice-President has ever been from Wisconsin, but Wisconsin Senator Robert "Fighting Bob" La Follette is considered one of the greatest senators in the nation's history. Not as impressive as ruling a nation for centuries, but this is a democracy. Today, Heilongjiang is 95% Han Chinese and only 3% Manchu, according to Wikipedia. Similarly, according to the 2000 US Census, Wisconsin is 91.52% Caucasian and only 1.3% native American. If your family lived in Wisconsin or Heilongjiang 1,000 years ago, there's probably very few of you left today.

Finally, Heilongjiang is at the center of a complex international web involving China, Russia, and Wal-Marts in Wisconsin. The average Wal-Mart Superstore has about 900 wood products on its shelves. That's a lot of wood. Where do those products come from? Obviously, China. Those guys make everything. But where is China getting all of that wood? After massive flooding in Manchuria in the 1990s (due to deforestation), logging was made illegal in many parts of northeastern China. Well, it just so happens that the largest forest on Earth is just over the border from Heilongjiang in eastern Russia (where the virgin forests of Siberia are also protected). The Russian mafia controls the illegal logging, and most of the lumber is transported to China, where it is turned into products for export. The Chinese blame the fixed pricing schedule of buyers like Wal-Mart for forcing them to buy illegally harvested lumber from Russia. At the prices that Wal-Mart demands, harvesting wood in sustainable and responsible ways is impossible. Wal-Mart has said it will crack down on the practice, but massive damage has already been done. Some estimates have the lumber coming out of Russia at 1/3 the level being logged in the Amazon. Le sigh. As I blog this, sitting on a stool that D and I bought at Ikea, I can't help but feel responsible. Are we doomed?

Flickr Pro

I just upgraded my Flickr account to Pro, so all of my old photos are online again. I've also changed the Flickr badge to the right to include a random selection of those photos. I'll be tagging all of them over the next, say, 2 years.

Volunteer Work

D and I were interested in finding some volunteer work, so, along with our friend Jeremy, we signed up with the Boston EITC Coalition. From the campaign's website:

Spearheaded by the Office of Mayor Thomas Menino, the Boston Earned Income Tax Credit (EITC) Coalition is a partnership of nonprofits, businesses, and community organizations that promote the economic independence of working individuals and families.

The Coalition's campaign to advocate for low and moderate income workers began in 2001, when free tax preparation services were provided to a few hundred residents. Now serving over 12,000 taxpayers each year, Coalition sites and volunteers have returned a total of $83.4 million in federal refunds to Boston families. The Coalition operates 25 free tax sites throughout Boston neighborhoods, some of which also provide additional financial services such as credit advising, financial coaching, and benefits enrollment.

Jeremy, D, and I volunteered as tax preparers and we completed our one day, 8-hour training session on February 7th. On the same day, all three of us took the IRS certification test online and passed it (as always happens, D got the highest score). We all signed up to volunteer at the Jewish Vocational Center on Winter Street, just off Boston Common. This past Thursday was our first day of actual tax prep work. Our tax site's coordinator, Nancy, told us our first day would be slow, with us observing a more experienced volunteer and then doing one or maybe two tax returns. Nope. The three of us were half of the location's staff and it was too busy to take it slow. Nancy told Jeremy and me to help a woman, figuring that two people who don't know what they're doing equal one great tax return. It actually went pretty well, and the woman we were helping was lovely. She had two kids and tried to write-off her son's iPod and PlayStation as educational expenses (her justification was that her son used the iPod at school). D was able to sit with a more experienced guy and soak it in a little bit better. I did two more returns and just that took me from 5:30pm until 8pm.

None of the people I prepared a return for was born in the US. It's too awkward to ask someone where they're from, especially since you don't really need to know for the purposes of his or her taxes. I would say that I helped a woman from Turkey, a young guy from Southeast Asia, and an Indian student at UMass. The Indian student at UMass I know for sure, but I'm just guessing with the other two.

It was generally a very enjoyable experience. D had a problem with a guy who believed he was entitled to a much larger refund. He had a friend of his "do the math" and he knew he was supposed to be getting $1,000.00 back, or as he kept stubbornly referring to it, "a G-note." We volunteer on Thursdays and this will continue until April 15th. There's other work we could be doing for this program, but maybe by then we'll want to explore other options. It feels good to contribute though.

New York City on the Mississippi River

China is so large that I'm going to say it has two New Yorks. I'm going to call Shanghai "New York City #1" and Hong Kong "New York City #2." I'm not going to call either city a Los Angeles or a Chicago because as financial capitals, they more closely resemble New York. And if you're wondering why I'm posting about a city in my series about China's provinces, Shanghai is a province. There are four provincial-level cities in China: Shanghai, Tianjin, Beijing, and Chongqing.

New York City and Shanghai are the largest cities in their respective megastates. Eighteen million people live in New York's urban area (pictured below) and 18.9 million people live in Shanghai municipality (pictured above). I'm comparing New York's urban area to the city limits of Shanghai because they're similar in size. If you expand both cities to include their metro areas, New York has the larger population, but it's three times larger in size (the New York metro area includes cities as far away as Trenton, NJ and New Haven, CT). So Shanghai is the larger city, and it's growing much faster than New York: from 1990 to 2000 Shanghai's population grew by 25.5% and New York's by 9.3%.

The city is centered on the Huangpu River, which flows north into the Yangtze. The picture below, used on the cover of every book about China's Rise, is of Pudong (浦东), or "East of the Huangpu." It was an undeveloped part of the city until 1990, when it was turned into a Special Economic Zone (SEZ). These zones, established all over China, were an effort to encourage foreign direct investment by creating a very different business atmosphere than existed in the rest of China. Foreign companies got tax breaks, greater freedom in international trade, and other perks. The Shanghai Stock Exchange is in Pudong, as are some of the tallest buildings in China. In the photo below, you can see the Oriental Pearl TV Tower on the left, and the two tallest buildings on the right are the Shanghai World Financial Center and the Jin Mao Building. The Park Hyatt Shanghai is in the building that looks like a giant bottle opener, and you can stay there next weekend for $322.13 a night (I just checked online). Or you could get a room at Aria in Las Vegas for only $199 (and if you do, $0.0000852317 of that is mine). The Shanghai Tower is currently under construction and when completed it'll be the tallest building in China (and 43% taller than the tallest skyscraper in the US). While the US invented the skyscraper and had all of the tallest buildings in the world until 2003, we should take some comfort from the fact that American architectural firms will have designed the four tallest buildings in China after the completion of the Shanghai Tower.

Shanghai is competing with Hong Kong to become China's financial and trade center. Thanks to its proximity to the Yangtze and the ocean, it's the busiest port in the world (by cargo tonnage). In another way, Shanghai is sort of like New Orleans. Shanghai is at the mouth of the largest river in Asia, like New Orleans is at the mouth of the Mississippi. The Port of South Louisiana (between New Orleans and Baton Rouge) is the busiest in the US (by tonnage), but it handles a third of the cargo that Shanghai does. America's busiest container port is in Los Angeles, but Shanghai does four times the container traffic too.

New York and Shanghai are both cities of the future. Their presents and their futures overshadow their pasts. However, as China is still a developing nation ("third world" is so passé), with half of its population in rural poverty, Shanghai's future burns a bit more brightly. Shanghai is already larger than New York and average incomes in Pudong are 16 times higher than in the rest of China. It's already a world capital and it's growing at 3 times the rate New York is! Shanghai's future is tied to China's, and I am optimistic about both.

Some structure for 2010

Demetri Martin inspired me. I watched his "If" show from 2004 and I really like his weekly point system idea. If you haven't seen it, skip forward to 6:40 in the first clip and watch it to the end. Then watch the second clip until 3:56.

So, I've already made the first version of my weekly point system. I only have 5 categories (Demetri had 7) and my score is out of 24, not 35. Here's the list:

MIND
Write in my journal everyday, serious reflection only
Practice the guitar for an hour a day; 4 days
Practice Japanese for an hour a day; 4 days
Read 2 books
Draw for an hour a day; 4 days

BODY
Cook new recipe
Work out for at least 1 hour; 4 days
Brush teeth twice daily & floss once daily; everyday

CAREER
Improve GMAT Score by ____ points
Learn co-worker's GL
Average # of daily open items this week < open items last week
Network with 1 person

MANAGEMENT
Earned extra $50 (or more)
Spent less than $100 for the week (Rent, util., loans, T-Pass, & taxes not incl.)
Did load of laundry
Took trash to the curb
No dishes in the sink at bedtime; everyday
Thoroughly clean one room of condo

RELATIONSHIPS
Talk to friend or family member for 15 minutes on the phone
Do something nice for D
Date night
Get together with friend(s) in Boston

CONTRIBUTION
1 hour of volunteer work
Do something for the Earth

I don't anticipate this experiment being a failure. Demetri seems to think he failed at this. He asks, rhetorically, what would a 35 point day have looked like? I think he missed the point of his own system. Getting all 35 points in a single week is meaningless. The goal isn't to talk on the phone for 15 minutes this week, it's to have better relationships with everyone I know. Talking on the phone is just a way to quantify the progress I'll be making toward the real goal. I'll update when I have serious revisions to the list.